UK unemployment could reach three million, report claims
UK employment group predicts government spending cuts will push unemployment to three million
Thursday, 10, Jun 2010 02:48
By Sarah Garrod.
A report from a UK employment group has predicted that government spending cuts could push the number of people in unemployment to three million.
Today's report from the Chartered Institute of Personnel and Development (CIPD) also said there was little likelihood of wage growth until 2015.
The report comes ahead of the chancellor George Osborne's emergency Budget on June 22nd - which is likely to see fiscal cuts to reduce the budget deficit.
John Philpott, the CIPD's chief economic adviser, made his predictions by comparing the UK's approach with that used by Canada's government in the 1990s. He said the UK government's approach "owes much" to the Canadian Liberal policies, which saw 265,000 jobs lost from its three million-strong public-sector workforce in the 1990s.
At that time the public-sector share of total employment fell from 26 per cent to 19 per cent.
Mr Philpott said: "On an equivalent scale, this translates into around 500,000 UK public-sector job cuts, in line with the CIPD's own pre-general election baseline estimate for 2010-2015.
"However, the latter estimate was based on a roughly 60:40 split between cuts in public spending and tax hikes as means of deficit reduction. If, as seems likely, the coalition government adopts a split closer to 80:20, UK public-sector jobs losses of around 725,000 are expected."